Cromford-Report: Greater Phoenix – Single Family Detached
* A big contrast exists between the market under $200,000 and the market above that figure
* Enthusiastic buying below $100,000 is causing significant price rises as inventory becomes tight.
* Above $200,000 the market continues to deteriorate slightly.
* Above $400,000 there is potential for further price weakness unless demand improves.
* The overall average for sales pricing is now on an upward trend.
* REO inventory is falling fast, especially at the lower price levels.
Overview The demand for homes between $50,000 and $150,000 continues to be particularly strong as investors, many from out of state, seize the profitable opportunity of becoming landlords. Demand from owner occupiers remains relatively weak due to the difficult financing climate. The supply from foreclosures continues to fall very fast and short sales are becoming a more important part of the picture. Lenders are receiving far fewer homes into REO inventory as a larger percentage of the trustee sales result in a sale to a third party. The market below $200,000 is now highly supply constrained.
Homes over $400,000 are suffering from lower demand and the supply has started to creep back up. Demand for homes over $3,000,000 remains very weak especially compared with this spring.
A clear and significant upward trend has developed in the price of homes below $200,000, particularly those sold by lenders. In contrast the pricing for homes over $400,000 is currently very stable but with the possibility of a bias to the downside. Because of the high sales volumes at the low end, price averages are very likely to push higher which may have a positive effect on sentiment.
The period from the second half of August to the first half of September represents a low point which looks likely to be seen in hindsight as our second market bottom, the first having been April 2009.
Foreclosures New notices of foreclosure continue to be filed at similar levels for the last two months, though more than 50% down from the levels of 2009. We now have fewer homes pending foreclosure than at any time since the middle of 2008. However, more of these are finding solutions other than the trustee sale and the completed foreclosure counts are now falling fast.